Average rents rose 1.6pc in November, driven by ‘acute’ property shortages
Rents are rising at twice the annual rate of earnings, as tenants jostle for limited accommodation – especially around urban centres offering better employment prospects.
Average rents across England and Wales reached £753 a month in November, up 1.6pc from November 2012.
Wages have risen by just 0.8pc – average regular monthly pay before tax stands at £1,941.
The news is good for landlords. Research by LSL Property Services, which owns the UK’s largest network of lettings agents, shows the average landlord has seen total annual returns reach 8.9pc thanks to rising house prices. This represents an average return of £14,592, with rental income of £8,243 and capital gain of £6,349.
It said if rental property prices continue to rise at the same pace as over the last three months, the average buy-to-let investor in England and Wales could expect to make a total annual return of 10.5pc over the next 12 months, equivalent to £17,294 per property.
With house prices expected to soar over the coming years, experts are predicting landlords will look to expand their portfolios in 2014.
David Whittaker, of specialist landlord broker Mortgages for Business, predicted a 25pc increase in business next year. “The intention of landlords to expand further demonstrates that demand for rental property shows little sign of waning,” he said. A survey of 300 clients found 57pc wanted to buy further property in 2014. Of those already owning more than 10 properties the proportion was higher, at 66pc.
